GCI is Chittum's featured example in a piece about the insanity of newspaper publishers refashioning themselves into technology companies -- while simultaneously paying crazy-high dividends. (Gannett's yield climbed to 9.5% today, after the stock closed at $16.87, down 2.3%.)
News Corp. CEO Rupert Murdoch (left) said of Dow Jones & Co. before buying the Wall Street Journal publisher last year: "A year ago, they made $81 million after tax and paid $80 million in dividends, and you can’t grow a company that way."GCI's top brass ought to listen to Murdoch. After all, he had the smarts to bet nearly $600 million on social network MySpace -- an investment now worth billions. (GCI's notion of an edgy bet was to invest a reported $8 million in social-network Cozi.) Craig Dubow needs to grow a pair: Take that $311 million and start acting like a real entrepreneur -- instead of a Wall Street lapdog.
Earlier: GCI's Connell says no dividend cut in the works, but . . .
How could Gannett put $311 million to better use? Please post your thoughts in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.
I don't think Gannett needs to buy more companies. I am constantly asking myself, however, why Gannett is so gung-ho with third-party vendors (Maven, for example) when it certainly has the resources and the talent within its own web department to do it better -- cheaper.
ReplyDeleteIf it is done in house, it will ultimately cost more. That's why outsourcing works. I can't imagine why the company continues to keep things in house when it should be slicing off the excess and getting work done elsewhere.
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